California City Plans to Pay Needy Residents

Stockton, California, has faced immense challenges in recent years. But its young, homegrown mayor wants to put it back on the map — and this time, for the right reasons. . (Photo: Justin Sullivan/Getty Images)

Stockton, a mid-size city situated along the San Joaquin River in California’s Central Valley, isn’t used to making flattering news.

Established as a transportation hub and asparagus-dominated agricultural center during the Gold Rush era, Stockton — strong in community and crucial in the development of the Golden State's early economy — is perhaps best known as the first major city in United States history to declare bankruptcy. (Only Detroit, which filed for federal bankruptcy protection a year later in July 2013, is larger.)

Ravaged by some of the highest foreclosure and unemployment rates in the country following the implosion of the housing bubble in 2008, Stockton garnered international headlines as the de facto epicenter of America’s subprime mortgage crisis. In subsequent years, the farmland-enveloped city of 300,000 has been ranked as the most obese metro area in the U.S. (tied with Montgomery, Alabama); America’s most miserable city (per 2009 and 2011 Forbes rankings); and California’s second-most dangerous city (behind Oakland).

Foreclosed home in Stockton California
Following the financial crisis of 2008, Stockton experienced the highest foreclosure rates in America alongside Las Vegas. (Photo: Justin Sullivan/Getty Images)

Dead broke and synonymous with property crime, gang violence, drug abuse and homelessness, Stockton was at long last on the map. In the worst way possible.

But that was a few years back. And while still on the mend today, this humble, hard-working and newly fiscally healthy city with a diverse population and progressive new mayor is now attracting positive attention for launching an experiment that will lend low-income residents a helping hand in a manner that's never been successfully implemented in the U.S.

From Chapter 9 to unconditional cash

It’s odd to think that a city once notorious as America's foreclosure capital is now on the cusp of providing its most vulnerable residents with a basic monthly income, no strings attached. But it's happening ... and Stockton is leading the charge.

The idea behind the ages-old (paging Thomas Paine) concept of providing citizens with an unconditional basic income is to ensure that no one, regardless of social standing or employment status, goes without a certain level of financial security. While historically a fringe concept, there’s been a flurry of renewed interest in piloting universal basic income (UBI) and basic living stipend (BLS) programs due to the rise of technological advances — particularly artificial intelligence and automation — that will lead to job losses and stagnant wages.

As envisioned by Mayor Michael Tubbs — at 27, the Stockton native is the youngest mayor of an American city with a population more than 100,000, as well as Stockton’s first African-American mayor — a select number of low-income families would receive $500 per month for a year beginning as early as 2018.

Cover of Stockton newspaper, 2012
In 2012, Stockton — California's 13th largest city — became the largest American city to file for bankruptcy protection. (Photo: Justin Sullivan/Getty Images)

Funding for the scheme, titled the Stockton Economic Empowerment Demonstration (SEED), would not come from city coffers but from individual and institutional philanthropy. A major funder is the Economic Security Project, a New York-based basic income advocacy and research group co-chaired by Facebook co-founder Chris Hughes. Founded with the belief that free cash can effectively help to "end poverty and rebuild the middle class in America," the organization has donated $1 million to ensure that SEED flourishes.

Providing a universal basic income is an increasingly popular idea amongst the ultra-wealthy giants of Silicon Valley (Tesla CEO Elon Musk, Y Combinator president Sam Altman and Hughes’ old Harvard roommate Mark Zuckerberg among them), who see it as a sort of inevitable necessity as robots replace blue-collar workers with greater and greater frequency.

"I think we'll end up doing universal basic income," Musk told a packed house at last year’s World Government Summit in Dubai. "It's going to be necessary."

"There will be fewer and fewer jobs that a robot cannot do better," he said. "I want to be clear. These are not things I wish will happen; these are things I think probably will happen."

While Stockton's plans are a first for the U.S., similar pilots have been implemented in the Canadian province of Ontario, in Finland, in the Dutch city of Utrecht and in Nairobi, Kenya. The oil revenue-funded Alaska Permanent Fund, established in 1976, is a close relative of UBI.

A street in Stockton, California
Despite its status as a leading agricultural hub, a disproportionate number of Stockton residents experience food insecurity. (Photo: Justin Sullivan/Getty Images)

A SEED is planted

While SEED benefits from the largesse — and close geographic proximity — of Silicon Valley and its major players, Stockton’s visionary mayor cites an earlier proponent of a universal basic income as inspiration: Martin Luther King Jr.

As reported by Vox, Tubbs was largely moved to action by King’s final 1967 book, "Where Do We Go From Here: Chaos or Community" and its call for a guaranteed minimum income for all. Tubbs’ own experience growing up poor as the son of a teenage mother and incarcerated father also played into his quest to implement a basic income in his hometown.

Stockton, California Mayor Michael Tubbs
Stockton, California Mayor Michael Tubbs. (Photo: Larry Busacca/Getty Images for the 2014 Tribeca Film Festival)

"I think Stockton is absolutely ground zero for a lot of the issues we are facing as a nation," Tubbs recently told Northern California public radio network KQED. "I feel that as mayor it’s my responsibility to do all I could to begin figuring out what’s the best way to make sure that folks in our community have a real economic floor."

Per KQED, Tubbs hopes that Stockton's trial run investing in its citizens — instead of flashy new attractions geared to bring in tourism dollars — will give the city a morale boost while influencing other cities struggling with inequality and high unemployment.

Writes SEED of the country's first public/private basic income demonstration project:

We are a city with a challenging past — and a promising future. Stockton is in many ways a microcosm of the United States: in recent years, major shifts in our economy, persistent wage stagnation, and rising inequality have made it increasingly difficult for hardworking residents to make ends meet. 1 in 4 residents living below the poverty line. If a guaranteed income can have a meaningfully positive impact on the lives of Stocktonians, it will everywhere. We believe this initiative will highlight the resiliency and grit of our people. And it will show the nation and the world that ours is a community of hardworking, determined individuals who can forge ahead if only given the opportunity.

There are still details to be ironed out as SEED takes root, including the exact number of low-income Stockton residents who will receive the guaranteed $500 per month and how exactly they are selected. (A lottery system is most likely.) Last fall, Tubbs, working in collaboration with the Reinvent South Stockton Coalition, launched a multi-month "design period" that will help shape the program and, according to SEED, "prioritize community engagement and feedback." (You can hear Tubbs, a Stanford grad and subject of the 2014 documentary film "True Son," discuss SEED in further detail in the Pod Save America podcast below.)

Whatever the case, the Associated Press notes that the number of recipients will ultimately number "several dozen." Depending on funding, the number could perhaps expand. SEED will track how the money affects each recipient's "self-esteem and identity" and how each chooses to spend the monthly funds.

"I’m excited about just showing what people do with increased economic opportunity," Tubbs tells Vox. "Being able to devote their time full time as a parent or caregiver, going back to school to reskill, investing in a new business. I know the ingenuity of some of the folks in my city."